McDonald's by: Zach Clinton

McDonald's is a leading competitor in the fast food industry

Main Competitors: Wendy's, Yum Brands, Chipotle Mexican Grill

Ratios to look at: Liquidity Ratios, Leverage Ratios, Activity Ratios, and Profitability Ratios

Liquidity Ratios: Current Ratio - 2015 MCD (3.27) - 2016 (1.40), WEN (2.29), CMG (2.91), YUM (0.55), and the Industry Average is (2.25) (Liquidity Analysis, 2017).

Quick Ratio - 2015 MCD (3.05) - 2016 MCD (0.78), WEN (2.28), CMG (2.86), YUM (0.47), and the Industry Average is (2.11)

Leverage Ratios - Debt to Equity Ratio - MCD (4.35), WEN (4.46), CMG (0.28), YUM (7.33), and the industry average is (4.11)

McDonald's has always been known for their large amount of current assets and it is a highly debt leveraged company

Activity Ratios - Inventory Turnover - MCD (173.89), WEN (207.10), CMG (182.01), YUM (36.27), and the industry average is (149.82)

Profitability Ratios - GPM (38.52%), OPM (28.12%), NPM (17.82%) - All greater than its competitors

So why has McDonald's been a Power House for all of these years?

Trademark and Symbol: Golden Arches - A law blogger wrote, “The general public, by in large, as well as their customers know that a golden arch represents McDonald’s. Their golden arch symbol clearly differentiates them from other fast food restaurants” (Five Classic Examples of Trademark, 2012).

Some more ideas that come to mind when you think of fast food: Trademarks of McDonald's - Big Mac, Ronald McDonald

Even though McDonald's has been a power house - still has weaknesses

Massive drop in sales over quite a long period of time

Hiring of New CEO, Steve Easterbrook

Steve Easterbrook Implements the Turnaround Plan: “great-tasting, high-quality food with better service each and every time” (Peterson, 2015)

Turnaround plan

-Payback all of its shareholders - this is what has been causing the large drop in the current assets

-Add things to the Menu (all day Breakfast, and also revamping the McCafe)

Another Big thing McDonald's has been focusing on is the look both inside and outside of the restaurant

Old Look = Cafeteria feel, clown colors (above picture), whereas now they are focusing more on a modern look and feel to attract more people of all ages

Technological Advances play a huge part as well: self-service, touchscreen burger kiosks, table service

According to Max Carmona, McDonald’s senior director of U.S. restaurant design, says that, “Historically, a refocus like this amounts to about a 6 or 7 percent increase in sales” (Bellomo, 2016).


McDonald's has always been a powerhouse in the industry but the downward trend in sales was a cause for concern

The hiring of new CEO, Steve Easterbrook, has really been a positive thing for the company as he has brought in discipline, accountability, and quick decision making.

McDonald's is heading back in the right direction as the net income rose by nearly 3% in this most recent quarter and its net sales are slowly starting to progress again (SEC, 2017).


Bellomo, R. O. (2016). You won’t even recognize the mcdonald’s of the future. Retrieved from

Five Classic Examples of Trademark. (2017). Retrieved from

Liquidity Analysis. (2017). Retrieved from

Peterson, H. (2015). McDonald’s CEO reveals his massive plan to save the business. Retrieved from

U.S. Securities Exchange Commision. (2017). McDonald’s Corporation. Retrieved from


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